ITAB Shop Concept AB (publ) ($ITAB)

Welcome to ITAB Shop Concept Q1 Report 2026 Presentation. [Operator Instructions] Now I will hand the conference over to the speakers; Interim CEO and President, Glauco Frascaroli; and CFO, Andreas Helmersson. Please go ahead.

Good morning. Good morning, everyone. We are here today to present our Q1 2026. I just want to give you some information for the people that doesn't know ITAB. So I want just to tell you about our production facilities that we have around 22 production facilities in 16 countries. We are operating in more than 30 countries with around 5,300 employees. Our net sales is around SEK 13 billion with our EBITA of around SEK 835 million. Our EBITA margin is 6.3%. Our region -- our grocery that is around 51% of our sales. Then we have fashion that is around 12% of our net sales and then we have DIY/Home improvement of around 10%. Then we have Health and Beauty, 6% and then other customer groups that is around 21%, where we have consumer electronics, travel retail, sports & leisure, services stations, hotels, offices and brands industries. Our solutions are retail interior, retail technology, retail lighting, retail services. Our strong brand is rethink, retail, together, who co-create a retail experience that connects people with the brands they love. I want to give you some highlights of the Q1 2026. We had a solid start of the year in a cautious market. Our Q1 net sales are around SEK 2.9 billion that is around 7% currency adjusted minus 7%. Adjusted EBITA is around SEK 164 million, SEK 192 million over the previous year, excluding nonrecurring items, amortization of acquisition related to immaterial assets. Net profit is SEK 70 million is higher comparing to last quarter 2025, Q1 2025. Our cash flow operation is SEK 214 million. We improved margins with purchasing synergies and lower SG&A expenses with a strong cash flow and profitable growth in focus. Here, I want to underline that I think that in Q1 we have done a great job because I think we have to be positive on what we have done in Q1 because you know all of us know that we are facing a difficult situation in the economy worldwide due to the war in Iran and other things that are not helping us a lot, but I think we really are proud of what we have done. We can do better for sure in the future, but we are positive what we have done. If we look to the rolling 12 months, net sales are SEK 12.8 billion comparing to SEK 13.2 billion in 2025. Our adjusted EBITA is around SEK 800 million comparing to SEK 835 million in 2025. We have our plan of EUR 30 million in synergies that we have to complete by end of 2027, and we are working and we are also positive on that. Saying this, I pass the word to Andreas Helmersson, our CFO.

Thank you, Glauco. To give a representative view of the development of the group, we have, as usual, focus on the pro forma development in this presentation. And in the interim report published, you will, of course, find all the details, including reported figures with HMY consolidated from February 2025. In the historical performance overview, we are comparing EBITA development over time. And this is very similar to the EBIT figure that we previously showed during 2025, where we also excluded amortization of acquisition-related intangible assets, which is more an accounting term than it's not a natural cash flow or cost in a sense. So we will look more at EBITA onwards. Adjusted EBITA in Q1 came in at SEK 164 million relative to SEK 204 million last year. Q1 is normally a softer quarter for us due to seasonality of store operations. And this year, we also see a general slowdown across sectors. So it's not in one country or in one sector, but across many sectors. And at the same time, we have managed to sustain margins due to synergy execution and initiatives. Q1 pro forma sales development of minus 12%, but if excluding the currency effect, it's minus 7%. And this is the main sort of driver of the drop in EBITA for the quarter. In the report, you can also see that our net profit was SEK 70 million, and this is higher than last year, coming in at SEK 41 million, driven by lower adjustments of non-recurring costs, but also an improved tax rate. Net debt was also further lower in Q1 and is now at SEK 2.1 billion, down from SEK 2.3 billion end of 2025. Looking at the quarterly development over time, we can see that despite an organic sales decline of minus 7%, gross margin was actually sustained and also EBITA margin is adjusting for extraordinary costs and provisions affecting comparability. And the impact from the sales decline is hence mitigated by impact of synergy execution, where we estimate to be circa 1/3 into the program from a P&L perspective. Zooming in on the sales development. Our organic growth rate currency adjusted now, we see that sales were lower across most of the sectors, reflecting a hesitant market where projects have been either put on hold or pushed into Q2 or Q3, and we don't see signals of losing market share. That doesn't happen very quickly and very often at all in this industry, but we do see a weak general market temperature. Our largest sector grocery is holding up somewhat better. And this is normally what we see when uncertainty increases in the economy that grocery is still a bit stronger and less cyclical. The U.S.-Iran conflict is, of course, impacting the decision power of our customers in general through higher transport costs and inflation and uncertainty -- general uncertainty about the outlook of the impact in our economy. And at the same time, efficiency and loss prevention solutions are really driving growth for us also in Q1, and it remains a pocket of growth. And we see this strong interest, especially in guidance and gates and self-checkouts and not the least as a result of our participation at the EuroShop, where we saw strong interest in this part of our offering. And in general, those product segments were of highest interest across the visitors we had at the EuroShop. From a geographic standpoint, we saw a mixed development in Q1 with strong growth in some regions such as the Nordics, where we can also see that underlying growth in the market is very strong. While Southern Europe is down 9% here, we actually saw a mixed picture also there where Spain and France were very strong with France being due to some local market dynamics through acquisitions, especially in the grocery market where they are rebranding stores and also the fact that we are sort of gaining some market share due to very our local production facilities, but also strong relations in this sector. So that has been great to see. And Spain has also been very strong, while Italy has been very weak. And it's not just one sector, but it's across customers and across sectors. So -- and then Eastern Europe is down quite significantly, 35%, but it's mainly driven by a few larger customers where the rollouts have slowed down compared to last year. And on the contrary, we see growth in Australia, driving the rest of the world market, where we continue to grow our portfolio of customers, which is great to see. And at the same time, also increasing the depth of this relations. So they're buying more products and more wider part of our portfolio and especially in the retail tech segment. Looking at the development of EBITA a bit closer and comparing it to the quarter 1 last year, we see that sales volume is impacting us negatively with SEK 59 million, while margin and mix is holding up despite lower volume in the factories. And SG&A is also neutral despite inflation and some extraordinary costs in this quarter. And actually, our result is in line with last year if we adjust for extraordinary costs and items affecting comparability. And we see this as a signal that our synergies are being realized and that we're on the right path towards continued execution of these synergies, which will prepare us to capitalize on the market when the growth returns. Our operating cash flow for Q1 came in at SEK 214 million and rolling 12 at SEK 973 million. This is impacted positively by working capital development, where we have continued to see a release of accounts receivables and a strong focus on inventory management and payment terms generally across the group. Our net debt is also down in the quarter, now at SEK 2.1 billion versus SEK 2.3 million in Q4. And this is driven by our profitability, lower nonrecurring costs and improved working capital as we saw on the last slide. In Q1, we estimate that we are circa 1/3 into the execution of our synergy program as previously stated. The total synergy potential remains where we have communicated EUR 30 million per year with full effect in 2027. Synergies come EUR 20 million from cost efficiency and EUR 10 million from commercial synergies. Cost overlaps as well as some of the larger procurement categories has been the low-hanging fruit that we prioritized so far. And in parallel, we have assessed our manufacturing and logistics network to make sure we can capture opportunities. And we've also spent time building the foundation for commercial synergies by investing in sales force training, showrooms and cross-selling plans. Of course, we're looking forward to continuing updating you on this progress and our general business performance onwards. And with that, I hand over to you, Glauco Frascaroli.

Thank you very much. Going forward, which are our main priorities today is the profitable growth by capitalizing on all the positive outcome from EuroShop in February with a focus on our solution for loss prevention and store efficiency. Measures to improve our profitability continuously assessed and implemented in all parts of the group and mitigate the impact of higher costs due to the current situation in the Middle East, as everybody knows. Continued focus on integration and our effort to achieve the EUR 30 million, as Andreas mentioned before. Effort to reduce our tied-up capital and debt and that we have done already, I think, a good job. Launch of share value and culture, ways of working and strategic teams and priority for ITAB Group 2026. Before to close our presentation, I just want to give you some words about -- I think we have to think that ITAB today is the largest group in Europe and maybe in the world with the last acquisition of HMY, and also to our very strong portfolio of products, we have really a lot of chance when -- we know that the customer now are [ exiting ] the global situation, but we have really a lot of opportunities. And as soon as the market -- and I'm sure the market will start to move very soon. We have really -- thanks to our product portfolio, we can really be very successful. And this is my opinion, I'm very strongly convinced that our future is good. So thanks to all of you for listening.

[Operator Instructions] The next question comes from Erik Sandstedt from Kepler Cheuvreux.

Hi there, yeah. Erik Sandstedt from Kepler Cheuvreux here. A few questions, please. Firstly, in terms of organic sales, how much of the 7% decline is attributable to the legacy ITAB versus HMY roughly?

Yes, I can try to answer that. I think -- I mean, it's more related to where we have our market exposure. And we can see that France is quite strong. That's the market where legacy HMY was significantly stronger than legacy ITAB. And legacy HMY also had a strong foothold in Spain. And both France and Spain are very strong in Q1 this year.

Okay. That's interesting. And then I'm not sure you probably don't have a lot of market data yet, but do you think that the decline is largely sort of attributable to weak markets? Or do you think that you have lost some share in the quarter?

I can answer. I think, no. We didn't lose any shares in the market because I think the only problem is that the situation is, as I said before, the customers are [ exiting ]. And also, we have to say that when we have EuroShop normally, people are waiting to place new orders to see all the new products that we present. And I have to remember that to all of you that we had more than 50,000 visitors in EuroShop. So the results of EuroShop will come in the next month. So I don't see any -- we didn't lose any customer. We didn't see any -- we don't lose any market position. This is my feeling.

And then given the geopolitical tensions here and weak markets, is it fair to assume that trading conditions deteriorated throughout the quarter and that the exit rate was quite soft? Or how should we think about the dynamics within the quarter?

I think -- we have -- generally, I would say, when we meet the salespeople and talk about -- if we talk about Q2 and Q3, I think it's too early to say yet. We do see some early signals that there is some light in the tunnel, but some of that is also coming as a result of the EuroShop. So we can definitely see that it's -- EuroShop is a great way to meet existing customers, but it's also a great way to enlarge the relationships we have. And some of these customers, they are now inviting us to really as experts in fields like loss prevention where we are part of actually invited to group management meetings, and we are setting up showrooms in customer headquarters just really to -- as a testimony to that we are taking the lead when it comes to store efficiency and loss prevention. So I think there are some good signals but it's too early to say, and there's a big dark cloud on the sky as well being the U.S.-Iran conflict, which we are exposed to CapEx investment logic, and that means that you need to feel safe before taking large CapEx decisions that the economy will not suffer. So although we see some positive signals, it's too early to say where it will take us.

So just a follow-up on that, and this is my last question. But looking at your order backlog, just the other day, you announced a fairly big order in the U.K. with a total value of EUR 12 million, right? And could you comment on how long you have worked to secure such a deal? So what's the lead times from start of discussion to signing the deal? And what I'm curious about, of course, is how the sort of order backlog looks right now and how much visibility you have for the remainder of the year?

It's a good question. I mean we are not yet presenting order backlog or normally communicating anything around it. And it's something we're looking into, to see if we can start doing that in the future. But I think generally, it differs a lot depending on the project. I mean some of the framework agreements we have with customers, we have a pretty good outlook for the remaining part of the year. So they have a budget normally, they communicate that budget and there's no volume commitments, but we see very stable maintenance of stores or replacing shelving and it goes pretty -- but then there are things like loss prevention. And that can take anything from 3 months to 9 months to secure because we need to go through a series of customization of product technologies and testing, while they start with one store and then go into next store and then they test in 10 stores and then they evaluate the business case, right? And then we're going to roll-out. So it's difficult to say a guideline here, but we normally have quite good outlook for the next 1.5 months and decent outlook for the coming 3 months. But then it goes down.

The next question comes from Karl-Johan Bonnevier from DNB Carnegie.

My connection is quite poor. So I hope you hear me.

Yes, we can hear you.

Excellent. Just a couple of follow-up questions from me as well. As you said, you do not really want to talk about order backlog. But if you look at your commentary about clients that are for the moment, maybe putting orders on hold and delaying rollout, do you feel that you have -- if you compare it to a year ago or maybe at the start of the year, looking at the load that you saw ahead in the factories, how does it compare? Is it pretty stable? Or is it better or worse?

I mean we see a fairly stable situation still. I mean, seasonality-wise, Q1 is a bit softer than remaining. And then there can be, I mean, certain pockets of exceptional development where we -- I highlighted Italy as one of those now where we see -- I mean, Italy is one of those places where we have a really strong position, and we don't have 1 or 2 or -- we have a large customer base, and it's a slowdown across most customers. I mean, partially driven by government subsidies being a bit slower, but also market development and then being a bit closer to Middle East and so. But I think it's too early to say where it will take us, but we do see a mixed bag of some customers really being strong, having strong financials, having -- I mean, we see, as I mentioned in the report as well, self-checkout and some loss prevention products being very already in the order books and signaling a strong year, while some of the interior projects and some other projects, they're still pushing decisions. We thought we would have it in March perhaps, and then they're pushing it into Q2, partially because they haven't got maybe the budgets confirmed internally and sometimes, so there's different reasons depending on customers.

But it sounds like it's pretty much how you described it earlier that it's stable at a low level, and it's not really any change to it at this stage.

Yes.

Good to hear the France being back on slightly stronger footing. Could you elaborate what has been put in place during the second half of the year to say, reestablish that operation?

Yes. I think I can answer. We have done a lot of -- we launched a lot of projects to reduce the cost and to improve the production facilities. And also -- and this bring a lot of good synergies and good results that we start to see already at the end of Q4. But -- and then also we start the Q1 in a very good way because we start to take the market start in a very good way. The customers are moving a lot, so the sales are improving quite a lot. But let's say that it was not only the sales that are improving and increasing, but really this project that we launched last year, start to give the results that we expect. So this is why today, France is performing very well. And we are really happy with this because we think -- we thought since the beginning of the acquisition of HMY that France was a very important opportunity and upside for us. And this is something that we start to see in the reality, and this make up very positive thinking and looking to the future.

No doubt it's a huge market for you these days. It's good to hear that it's back on firmer footing. I see you not talking either about, say, maybe Turkey being such a challenge here at this stage as it was during second half of this year has been underlying business improvements there as well?

Yes. In Turkey, yes, for sure, we are changing the -- we are thinking about how we launched already the plan last year to restructure the company in Turkey. So we have plan to improve and reduce the cost. But also what I want to say that sometimes not only reducing cost is the final result that you can get from, but you have also to think about the market, the customers. So also, we are improving our customer network. We are back again in the Turkish market where we lost in the past some customers. Now we regained quite a few customers in the market. So let's say, going together in parallel with reducing costs and synergies and improving the customers network that we expect in the second part of 2026 in Turkey that we will bring the company again positive results.

Excellent. And I saw and hear your comments about Middle East maybe impacting you with higher costs for energy transportation and potentially increasing lead times. Which is the biggest challenge of those 3 when you try to disseminate it?

I would say it creates some uncertainty in the supply chain. So it means that we need to stay closer to our suppliers and our customers. And I mean there's high expectations on us delivering in time and on quality. And if one article is missing, then that creates complexity for us, which means additional costs in the installation of a project. So I think it's overall sort of project management, making sure that things are on timing. And then, of course, working heavily to mitigate cost increases, both internally, but also through our partners, both customers and suppliers. So it creates some additional efforts from us to make sure we protect our synergies and our margins in that.

Thank you very much for the very good split down on how you see the synergy evolving in the deal. And when you look at the commercial potential in this, I guess the cost side of this is on more of a firm time line, as I understand it. But when you look at the commercial synergies, how much do you see -- how important was EuroShop to really get the HMY side to be on top and be able to sell your light products and your technical products?

Yes, EuroShop was a fantastic opportunity for us because it was the first time that we came together with HMY in the biggest fair in the world that, as I said before, we had more than 50,000 visitors and was not expecting this result really. It was a big race effect. And I think this is a starting point together with HMY where we saw also customers from HMY very interested to our product portfolio that was not before in HMY. So we are starting in many countries now to promote these products. We are launching new showrooms in these countries with all our products. And for sure, the reaction on our retail tech portfolio is very, very interesting and very positive. So really concretely, we start to have already get orders and sales. So this is the most important thing to say.

Fantastic. Thank you very much for all and good management of the company, Glauco, on your interim period and all the best out there in the new assignments.

The next question comes from Anton Lund from SB1 Markets.

First off, on working capital, I see that inventory was built by SEK 170 million in the quarter. And I'm just a bit curious, I mean, comparing this to 7% organic growth decline. Can you walk us through what's behind the inventory build in the quarter? Is it that volumes are left on your shelves or higher raw material prices or is it a mix?

Inventory is -- it's generally not impacted that quickly from cost increases in the supply. It goes a bit slower. But to some extent, it's more project driven where we see we have projects that are waiting -- some projects we need to build up inventory to make sure we can really succeed with installation in time, partially also driven by EuroShop because we build up some inventory to be able to really be now in Q2 to have some of the high sellers sort of in stock to be really be able to capitalize on short-term demand. So apart from that, we see working capital as being really developing well in according to plans. And yes, then it's normal that -- I mean, Q4 is normally our lowest level in the year. And then we should expect to see a buildup over the year. And of course, the sales slowdown in Q1 is helping that in general, but you should expect Q2 and Q3 to be a bit higher and then to go down again in Q4.

Understood. And then on CapEx, it was down about SEK 25 million year-over-year here in Q1. Is this sort of your budgeted run rate for this year? Or is there something else that we should keep in mind?

No, it is a bit lower. We also -- we had a positive effect from selling real estate, which was EUR 1 million in. So the net is then EUR 1 million lower. But no, we continue with the CapEx levels that we've had historically as well and continue to invest in a similar pattern. So it's more seasonality when exactly these cash flows comes in.

Very good. And then I had a question on -- I mean, we've talked about your operational footprint, and it has been mentioned again today. So you -- as you say, you divested this property in Finland. And since we're talking about Turkish restructuring, are you considering any property divestments there? And if so, what kind of cash proceeds would you expect from such transaction?

Yes. I think we are -- from a synergy perspective, we have spent some time analyzing the sort of network that we have from a factory and it will continue. I think Turkey, most of this optimization, I don't think you should expect to see a cash in, but it could mitigate some of the restructuring costs that we see if we decide to -- in places where we have 2 factories as an example, and we think we can consolidate, then we're also investing at the same time in the new factory to make sure we can fit the volumes into that. So I think we are continuing to -- we see great progress in some of this, especially France, which Glauco mentioned, but we'll also continue to evaluate to really make sure we optimize the footprint and the cost efficiency, both in Turkey and France and a few other places where we have neutral sites.

Very good. And then one final one from me. The tax rate down to 24% this quarter, I believe. What do you expect to see ahead? I guess this is partially due to the better performance in France or how do you view this ahead?

I agree. France is -- it's a bit on the low side. You can't expect us to already be at 24%. I think that's more of a long-term target to reach. I think we're still in a transition year to make sure we optimize debt across the group and optimize the flows. But you should see a clear improvement versus last year. That's for sure. But it will take us another year to really make sure we optimize the flows. That's the plan. So it's a bit on the low side, but you should definitely see an impact from France. You should see an impact from optimizing the debt structure across the group. And we also have lower, of course, acquisition costs this year, which is nondeductible. So it's an impact from that as well.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes. We have only received one written question, and it's in line with one of the other questions that we've already answered. But could you give some color on the development during the quarter? How did the year start off in January and February compared to March? Yes. I think both January, February and March were slightly behind last year. So we don't normally see shifts that fast in the market. So Q1 is more a result of November, December last year, and it's a result of market conditions and some customer programs, which doesn't shift too quickly from month to month. Okay. Then we've answered all the written questions. So I hand over to Andreas and Glauco to maybe some final remarks before we close the conference call.

Yes. I just want to say that this is my last day as Interim CEO. So from tomorrow, Bjorn Borgman will be the new CEO of the ITAB Group. So very welcome to Bjorn and great success. And thank you to everyone.

Thank you very much.